The quantity of a good that the consumer chooses can increase or decrease with the rise in the price of a related goods depending on whether the two goods are substitutes or complementary to each other. Goods which are consumer together are called complementary goods. Examples of goods which are complement to each other include tea and sugar, shoes and shocks, pen and ink, etc, Since tea and sugar are used together, an increase in the price of sugar is likely to decrease the demand for tea and decrease in the price of sugar is likely to increase the demand for tea. Similar is the case wit other complements. In general, the demand for a good moves in the opposite direction of the price of its complementary good.

The demand for a good moves in opposite direction of change in the price of its __________.

Complementary goods

The correct answer is option (1) : Complementary goods

The statement is referring to the relationship between the demand for a particular good and the price of another good that is complementary to it. Complementary goods are products that are typically consumed together because they enhance each other's utility or usefulness. For example, tea and sugar are complementary goods because people often consume them together. Similarly, shoes and socks, or pens and ink, are examples of complementary goods.

When the price of a complementary good rises, it tends to decrease the demand for the other good. Conversely, when the price of a complementary good falls, it tends to increase the demand for the other good.

For instance, if the price of sugar (complementary to tea) increases, consumers may choose to buy less sugar. As a result, they may also buy less tea, as the utility of consuming tea without sugar may be perceived as lower. This leads to a decrease in the demand for tea. Conversely, if the price of sugar decreases, consumers may buy more sugar, which could lead to an increase in the demand for tea, as more people may find it affordable to consume tea with sugar.

So, when there is a change in the price of complementary goods, the demand for the related goods moves in the opposite direction. This is the principle explained in the statement provided.